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ADP starts reopening offices, stays firm on HCM plans

In an earnings call, ADP CEO said the company will manage the COVID-19 pandemic just like it has previous crises. It will take the long view and maintain its HCM investment.

ADP Inc. reopened some offices Monday for a handful of employees. Carlos Rodriguez, ADP CEO, announced the news on an earnings call, where officials reaffirmed their investments in ADP's cloud-based HCM and payroll platforms, despite the economic challenges. 

Approximately 98% of ADP's workforce shifted to remote work at the start of the COVID-19 pandemic. While the firm is "well positioned to continue operating this way," Rodriguez said, "we are in the early stages of bringing back a small portion of our workforce to the office on a volunteer-only basis." 

Indeed, during the earnings call, Rodriguez was in his office in Roseland, NJ, taking questions from financial analysts. The firm was reporting on its fiscal fourth quarter, which ended on June 30 and included a revenue decrease of 3% to $3.4 billion. For the fiscal year, revenues are up 3% to $14.6 billion. 

ADP has made some major changes in its HCM and payroll products, released last year. Its Next Gen HCM low code-platform was designed for rapid innovation. The platform enables users to create discrete, mini HR and payroll apps that can be easily configured.

The reason for ADP's investment in its HCM platforms "is to really move the needle competitively and to improve our position from a differentiation standpoint," Rodriguez said. 

Election changes may drive ADP HCM demand

Rodriguez took a range of questions covering the economy and even the impact of the upcoming presidential election. He indicated that the election could drive demand for more ADP HCM tools. 

"We're apolitical as a company," Rodriguez said, "but usually when there is an [election] change, there is change for employers."

Despite how horrible the situation is, it feels like this situation is transitory.
Carlos RodriguezCEO, APD

In terms of the economy, the firm expects the U.S. to get to approximately 7% unemployment by June 2021, said CFO Kathleen Winters. 

Rodriguez said the ADP board is long-term oriented, noting that the firm has been through the dot-com crash, Y2K, 9/11 and the global financial crisis of 2008 and 2009.

"Despite how horrible the situation is, it feels like this situation is transitory," Rodriguez said of the pandemic. He said the firm's approach is to maintain its investment in its platforms, and it has plans to increase its sales staff in its new fiscal year. 

"This company has a very long history of navigating through multiple changes and environments and multiple economic circumstances," Rodriguez said. "And now I think we will add to our repertoire managing a major health crisis and a pandemic."  

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